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A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Financial Markets".

Deadline for manuscript submissions: 28 February 2027 | Viewed by 5507

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Dr. Hongkang Xu

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Guest Editor

College of Business, University of Massachusetts Dartmouth, 285 Old Westport Road, Dartmouth, MA 02747-2300, USA
Interests: auditing; corporate governance; financial reporting quality; tax research; international accounting
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

This Special Issue, “Accounting Information and Capital Markets,” explores how accounting information influences the behavior of investors, analysts, and other market participants. As capital markets become more complex and information-driven, the role of financial and non-financial disclosures has grown increasingly important for market efficiency and resource allocation.

I welcome theoretical and empirical contributions that investigate the mechanisms through which accounting information—such as earnings announcements, management forecasts, audit outcomes, or ESG disclosures—affects asset pricing, trading behavior, information asymmetry, and corporate valuation. Research that leverages innovative methodologies, cross-country data, or interdisciplinary perspectives is especially encouraged.

Topics of interest include, but are not limited to, the following:

The value relevance of financial reporting.
The impact of disclosure regulation and enforcement.
Investor response to financial and ESG disclosures.
Audit quality and market confidence.
Information asymmetry and trading efficiency.
Technology-driven innovations in reporting and disclosure.
International comparisons of disclosure effectiveness.

This Special Issue aims to extend the existing literature by addressing underexplored areas and emerging developments in how accounting information shapes capital market outcomes. By bringing together cutting-edge research in this domain, I hope to foster a deeper understanding of the intersection between accounting and market behavior.

Dr. Hongkang Xu
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 250 words) can be sent to the Editorial Office for assessment.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-anonymized peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1600 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

financial reporting
capital markets
earnings announcements
voluntary disclosure
audit quality
ESG disclosure
information asymmetry
investor behavior
market efficiency
asset pricing
corporate governance
international accounting

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Published Papers (6 papers)

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Research

17 pages, 310 KB

Open AccessArticle

The Positivity of Earnings Conference Calls’ Tone and Cost of Equity Capital: Empirical Evidence from FTSE All-Share Companies

by Salah Kayed, Abdulhadi H. Ramadan, Ruaa BinSaddig, Bahaa Subhi Awwad and Raneem Fawarseh

J. Risk Financial Manag. 2026, 19(8), 557; https://doi.org/10.3390/jrfm19080557 - 26 Jul 2026

Abstract

Based on agency theory, this study examines the association between the optimistic tone of earnings conference calls and the cost of equity capital using an unbalanced panel of 342 non-financial FTSE All-Share companies (987 firm-year observations) over the period 2010–2024. Earnings conference call tone is measured using the financial sentiment dictionary and analysed using NVivo 14 software. The cost of equity capital is estimated using an implied cost of equity model. Panel specification is determined using appropriate panel-data diagnostic tests, while robustness is assessed through lagged-tone regressions, an alternative cost of equity measure, and two-stage least-squares (2SLS) estimation to address potential endogeneity. The results show a significant negative association between optimistic earnings conference call tone and the cost of equity capital (β = −7.787, p < 0.01). A statistically significant reverse association is also documented: A statistically significant reverse association is also documented: a lower cost of equity is associated with a more optimistic tone in subsequent conference calls (β = −0.001, p < 0.01). This result is interpreted as evidence of an association rather than a causal effect. Both results remain robust across alternative model specifications, lagged-tone analyses, alternative cost of equity measures, and endogeneity controls. The findings indicate that positive and transparent voluntary communication, particularly through earnings conference calls, is associated with lower information asymmetry and a lower cost of equity capital. Firms that have not yet adopted this communication channel may consider incorporating earnings conference calls into their investor-relations strategies to enhance voluntary communication with investors. This study contributes to the disclosure literature by documenting statistically significant associations between earnings conference call tone and the cost of equity capital under two model specifications in the UK market and by providing comprehensive robustness evidence supporting the stability of the reported associations. Full article

(This article belongs to the Special Issue Accounting Information and Capital Markets)

27 pages, 676 KB

Open AccessArticle

Earnings Predictability of DuPont Factors: Impact of Mean Reversion and Competitiveness

by Shanhong Wu and Jing Jiang

J. Risk Financial Manag. 2026, 19(6), 408; https://doi.org/10.3390/jrfm19060408 - 4 Jun 2026

Viewed by 324

Abstract

We reexamine the predictive roles of DuPont decomposition components—asset turnover (ATO) and profit margin (PM)—in forecasting future operating profitability. We demonstrate that ΔPM is conditionally informative, rather than weak per se, by integrating mean reversion and competitiveness and connecting findings to earnings persistence and industry structure. The prior literature generally finds that changes in ATO dominate changes in PM toward predicting future return on net operating assets (ΔRNOA), despite theoretical arguments suggesting that both components should contain predictive information. Using a sample of 99,938 U.S. firm-year observations from 1981 to 2020, we reconcile these findings by incorporating heterogeneous mean reversion and firm competitiveness into the DuPont framework. We first document that PM exhibits substantially faster mean reversion than ATO, which weakens the unconditional predictive power of ΔPM. We then introduce industry-relative measures of ATO and PM to capture firms’ competitive positioning within industries. The results show that both ΔATO and ΔPM become significantly more informative for firms with stronger relative competitive advantages. In addition, firms with higher relative ATO and PM exhibit higher earnings and revenue persistence and are more likely to sustain consecutive earnings increases. We further find that competitiveness effects are stronger in diversified industries, while mean reversion is slower in concentrated industries. Overall, our findings provide a unified framework linking DuPont analysis, competitiveness, and profitability persistence, with important implications for forecasting, valuation, and financial statement analysis. Full article

(This article belongs to the Special Issue Accounting Information and Capital Markets)

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40 pages, 4657 KB

Open AccessArticle

Nonlinear Association Between Controlling Shareholders and Financial Reporting Integrity: An Explainable Optuna-Optimized Ensemble Learning Approach in Egypt and Saudi Arabia

by Gihan M. Ali and Mohammad Zaid Alaskar

J. Risk Financial Manag. 2026, 19(5), 356; https://doi.org/10.3390/jrfm19050356 - 13 May 2026

Viewed by 867

Abstract

Financial reporting integrity (FRI) plays a critical role in capital market efficiency, yet its determinants remain difficult to model due to nonlinear relationships, heterogeneous firm characteristics, and institutional differences across emerging markets. Prior research largely relies on linear econometric approaches, which may overlook threshold effects and complex governance dynamics. This study develops an explainable Optuna-optimized Extremely randomized trees (ET) ensemble framework to examine the association between controlling shareholders and FRI in Egypt and Saudi Arabia. Using a panel dataset of 1746 firm-year observations over the period 2014–2022, the model incorporates advanced preprocessing and mutual information-based feature selection to enhance predictive accuracy and robustness. The proposed model significantly outperforms regularized linear models, standalone machine learning models, and alternative ensemble techniques, achieving R² values of 0.7935 in Egypt and 0.9231 in Saudi Arabia, alongside substantial reductions in RMSE and MAE. Diebold–Mariano tests confirm that these performance gains are statistically significant (p < 0.01). Explainability analysis using SHAP reveals that firm size and market share are the dominant drivers of FRI, while blockholder ownership exhibits a nonlinear and context-dependent association. Partial dependence results show a complex, non-monotonic relationship in Egypt—consistent with a monitoring–entrenchment trade-off—contrasted with a predominantly positive and monotonic association in Saudi Arabia. Importantly, these nonlinear patterns are not detected in conventional panel fixed effects models, highlighting the limitations of standard econometric specifications in capturing complex ownership dynamics. The findings highlight the importance of institutional context in shaping governance outcomes and demonstrate how explainable ensemble learning can uncover hidden nonlinearities in financial reporting behavior. This study contributes by identifying nonlinear thresholds and cross-country variation in ownership effects while integrating predictive performance with interpretability, offering a robust framework for analyzing corporate governance mechanisms in emerging markets and supporting more informed decision-making by investors, regulators, and policymakers. Full article

(This article belongs to the Special Issue Accounting Information and Capital Markets)

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23 pages, 1013 KB

Open AccessArticle

The Mediating Role of Audit Quality in the Relationship Between IFRS Adoption and Financial Reporting: Evidence from Big Four Auditing Firms in an Emerging Market

by Mohammad Zaid Alaskar, Abdulrahman Alomair, Abubkr Ahmed Elhadi Abdelraheem and Asaad Mubarak Hussien Musa

J. Risk Financial Manag. 2026, 19(3), 182; https://doi.org/10.3390/jrfm19030182 - 4 Mar 2026

Cited by 1 | Viewed by 1816

Abstract

This paper set out to investigate how the Big Four auditing firms in Saudi Arabia perceive the impact of International Financial Reporting Standards (IFRS) adoption on financial reporting practices, addressing ongoing debate in the literature regarding whether IFRS adoption consistently enhances reporting practices across different institutional contexts. Further, the study investigates whether audit quality (AQ) mediates the relationship between IFRS adoption and financial reporting quality (FRQ). To address these questions, a structured questionnaire was circulated among auditors and quality assurance auditors working in the Saudi branches of the Big Four. Responses were examined using partial least squares (PLS) analysis. The results showed that IFRS has a clear positive effect on the qualitative characteristics of financial reporting, aligning with evidence from earlier studies. The results also underscored the mediating role played by AQ in reinforcing the benefits of IFRS on reporting practices. The findings carry significant ramifications, specifically for major stakeholders, including regulatory authorities, financiers, board members, senior executives, and investors. Full article

(This article belongs to the Special Issue Accounting Information and Capital Markets)

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19 pages, 1861 KB

Open AccessArticle

Bibliometric Analysis of Earnings Response Coefficient: A Measure of Market Reaction to a Company’s Earnings Announcements and Key Drivers of Investor

by Syarifuddin Rasyid, Darmawati Darmawati and Haryanto Haryanto

J. Risk Financial Manag. 2026, 19(3), 177; https://doi.org/10.3390/jrfm19030177 - 2 Mar 2026

Viewed by 1156

Abstract

The Earnings Response Coefficient (ERC) has emerged as a pivotal topic in academic literature and financial practice, elucidating the critical relationship between corporate earnings information and market response, which directly impacts corporate performance evaluation and investment decision-making. This study aims to identify the most frequently researched topics in the Earnings Response Coefficient domain, explore the basic concepts and theoretical frameworks underlying ERC research, and propose potential future research directions in the field, all within finance and investment management. This research employs bibliometric analysis to use data from Google Scholar and Scopus, accessed through Publish or Perish (PoP), to evaluate the literature’s performance, explore related topics, and identify research trends, thereby deepening the understanding of ERC studies. The findings reveal that income smoothing and intellectual capital disclosure have a significant impact but low connectedness, indicating a need for deeper exploration to heighten their relevance in ERC studies. Research on corporate social responsibility exhibits a high degree of interconnectedness and substantial impact. Underexplored topics such as economic uncertainty and analysts’ influence require greater attention to understand their contributions fully. This study identifies publication trends and citation networks related to ERC, provides insights into researcher collaborations, and offers guidance for academics, practitioners, and policymakers to enrich their understanding, develop more effective earnings management strategies, and design regulations that bolster market transparency and efficiency in the realm of finance and investment management. This research is particularly beneficial for practitioners, as it helps evaluate more effective earnings management strategies and understand the market’s response to earnings information, ultimately enhancing firm value. For policymakers, this study provides a framework for designing regulations and policies that support financial information transparency and market efficiency to enhance economic stability and investor confidence. Full article

(This article belongs to the Special Issue Accounting Information and Capital Markets)

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26 pages, 571 KB

Open AccessArticle

Investors’ Information Risk Perception of Book-Tax Differences

by Moshe Hagigi and Kun Yu

J. Risk Financial Manag. 2026, 19(1), 6; https://doi.org/10.3390/jrfm19010006 - 20 Dec 2025

Viewed by 736

Abstract

We examine whether and how book-tax differences (BTDs) may affect investors’ perception of information risk. Using bid-ask spreads as a proxy for information risk, we document a positive association between bid-ask spreads around 10-K filing dates and positive temporary BTDs for firms with low analyst following or institutional ownership, consistent with larger positive temporary BTDs exacerbating information asymmetry for firms with poor information environments. Furthermore, this positive association is less pronounced for firms with higher analyst following or institutional ownership, suggesting that financial analysts and institutional investors mitigate information risk from positive temporary BTDs through their monitoring and information intermediary roles. We find similar results using positive permanent BTDs. Overall, our findings suggest that investors factor BTDs into their assessments of information risk, highlighting the importance of considering information risk in the valuation of BTDs. Full article

(This article belongs to the Special Issue Accounting Information and Capital Markets)

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